SOLD – 3118 Owasso St. San Antonio, TX 78211
How To Build Wealth Through San Antonio Real Estate Investments
If you are a potential out of state property investor and want to build wealth through San Antonio real estate investments, there are a few things that I think might give you some guidance and reassurance:
#1 San Antonio Is a Great Market for Under Market Value Real Estate Investing
This is a pretty unique market:
- Real estate is still inexpensive, with San Antonio real estate investments in my areas going for $40,000 or $50,000 wholesale.
- The economy is strong, with annual job growth in the 3-4% range.
- The local market is not oil dependent, so San Antonio real estate investors do not have to worry about a boom/bust cycle.
- The population is growing here year after year as is the number of jobs.
All in all, San Antonio is really good for real estate investors. It is a stable, growing market, and I did very well here in the last downturn.
#2 There Are Still Many Excellent San Antonio Real Estate Investment Deals
Another unique thing about San Antonio for real estate investors is that it is an old city, with a large stock of older homes built in the 1920s to 1940s. I have been investing here for 15 years, and I still drive down streets in my area that I have never been down before.
If you are a new San Antonio real estate investor, you may have trouble finding deals in all the normal places new investors look. One advantage of working with me is that I am at the level where I hire wholesaling companies to work for me and to find potential deals for me. My job is pretty easy when I have people send me San Antonio wholesale property. I just have to inspect the best deals and make offers.
You could spend hours and hours on your own trying to find your own San Antonio wholesale deals, or you could just buy mine.
I also have other real estate investors in San Antonio and agents send me deals because they know who I am, and they also know I close with cash in 10 days.
#3 I Recommend Flipping Properties to Build Capital and Then Buy and Hold
Some people like to flip and some like to buy and hold. My personal portfolio is mostly San Antonio buy and hold properties with owner financing, and a few rentals.
However, I do believe in this model for people who have limited capital:
- Buy a $50,000 San Antonio wholesale property either cash or with hard money; do $25,000 or so in rehab, and flip it for a $10,000 to $12,000 profit. You will need to have $20,000 to $30,000 cash to get rolling in this plan.
- Do 3-4 of those per year, or more if you can.
- After two years, you could have $100,000 or more. Use that money to buy San Antonio real estate investments to buy and hold – either buy in cash or do 20% down conventional finance.
This is a great, basic blueprint to build wealth in San Antonio real estate investing.
#4 San Antonio Wholesale Property Deals Are Profitable But…
I see many San Antonio real estate investors never do more than a deal a year because they are trying to make too much money on a single deal.
I have made millions of dollars in my San Antonio wholesale property career by doing San Antonio property flips for $5000 or $7000. I never understand why so many real estate investors get greedy and want to make $20,000 or $30,000 on a flip. I do 50 San Antoniio property flips per year and make $7000 each. That’s $350,000! Works for me!
Or, I do San Antonio buy and hold deals for $600 per month. When I do 10 more of those per year, that’s another $70,000 of income. I have no problem with that.
You have to have realistic expectations when you are buying and selling San Antonio investment properties. The prices are low, but you only are going to make so much money on one $60,000 house. Don’t get greedy, and you can do very well.
I have had several out of state property investors walk away from this fantastic San Antonio flip or buy and hold deal. They want to make too much money. You can make $15,000 on this flip in 60 days. Or, 13% per year on a San Antonio buy and hold.
- Address: 1723 W Ashby Pl San Antonio, TX 78201,
- Year Built: 1925
- Description: Under market value property, investors dream north of downtown, 3 beds 1 bath, 1000 sqft, built: 1925, lot size: .19 acres, yearly taxes: $1,700.00, estimated yearly insurance: $800.00; estimated repairs: 35K, includes new HVAC, updated kitchen/bath, flooring, paint in/out, exterior skirt, appliances, plumbing/electric up to code, paint out door storage exterior, trash, lawn maintenance.
- Max After Repair Value: $129,000.00
- Cash Price: $65,900 firm.
How to Do Your First San Antonio Wholesale Property Deal
To get started with your first San Antonio wholesale property if you don’t have much cash, you probably should start with a simple fix and flip project.
When you flip an under market value San Antonio property, you will buy it 20-30% under market value, and then do $10-30k in repairs so that you can resell it on the retail market.
Of course, there are many mistakes you can make when you fix and flip a San Antonio property, and you really have to know what you are doing. My advice to a rookie is to not take on a fix and flip project alone, at least for your first deal.
Wherever you are, I recommend that you work with an experienced real estate investor who ideally is also a licensed real estate agent. That investor can help you to find a good under market value investment property and guide you on how much repair to do.
If you are a handy type, perhaps you can do the repairs yourself. If not, your investor partner may be able to do it for you.
In my case, I have several full time work crews helping me with San Antonio flip properties and San Antonio buy and hold properties.
If you are going to do your first property flip project on your own, be sure to read this article I wrote about how to get hosed when you do your first fix and flip.
If you are interested in flipping San Antonio properties to build up cash, I can help you with it if you like.
You will need probably $20,000 cash to get started on your first flip. The rest can be funded through one of my hard money lenders. Cash is always best as it is cheaper, but if you don’t have it, hard money it is!
Expect to make $8000 to $10000 on your first flip. Below is a great first San Antonio flip property:
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- Address: 820 South San Manuel St., San Antonio TX
- Year Built: 1950
- Description: Under market value investment property, three bedroom, one bath that has 928 square feet. Beautiful home with TWO exterior storage units – this is a MAJOR selling point for the end buyer; most buyers are blue collar contractors, and they need their tools to be completely secure.
- Max After Repair Value: $99,000.
- Cash Price: $56,500.
- Exit Strategy: Owner finance this out of state investment property with positive cash flow with only $10,000 in repairs completed in 30 days – $900 per month, $5000 down, 30 year note, 10% interest. This San Antonio investment property offers passive cash flow with no maintenance.
- Alternative Exit Strategy: $25,000 in repairs and flip/resell retail – maximum ARV is $99,000. Profit $10,000.
How to Flip a Wholesale Property in San Antonio and Get Hosed
I mostly buy and hold investment properties in San Antonio TX now, but I still flip houses for out of state property investors. Over the last 15 years, I’ve flipped several hundred houses, and I’ve made my share of mistakes.
Hopefully, you can learn from the mistakes I made years ago and make good returns on your San Antonio flip properties. The biggest thing to avoid is without question to not buy the wrong San Antonio flip property! Avoiding the bad flip deal is hugely important.
And here are some of the mistakes in more detail that will get you hosed in your San Antonio flip project:
#1 Getting Your ARV from Zillow
I run into quite a few rookie investors who think that you can get an accurate after repair value by using Zillow and other websites. Let me be clear: If you are getting your ARV from online research, just take a pile of cash and burn it, because you are going to get hosed on the San Antonio flip deal.
You MUST work with a very experienced real estate agent (who ideally is an investor) who knows the area well and can determine an accurate ARV.
I for example am a San Antonio real estate agent and also an expert San Antonio real estate investor. I know down to the dime what the ARV is on a San Antonio flip property or a San Antonio buy and hold property.
#2 Fudging the Numbers on the 70% Rule
The 70% rule works like this: Take your ARV (which I sure hope is accurate!) and multiply it times .70. So, if the ARV is $100,000, multiply that times .70. That’s $70,000. Now, subtract your repairs (another area where you really have to know what you’re doing to make a San Antonio property flip work).
Say, the repairs are $20,000. So, you subtract that from $70,000. You now know approximately the maximum amount you can pay for that San Antonio flip property.
Some rookie investors will fudge the numbers here because they fall in love with a deal. Never do that. Be ruthless and disciplined when determining the maximum amount you can pay. Your profits depend on it.
#3 You Buy the San Antonio Flip Property with No Exit Strategy
As I said above, I usually buy and hold San Antonio properties long term now – with owner financing. It is, however, a good idea to have a couple of exit strategies in mind if something goes amiss.
For example, you could rehab the San Antonio wholesale property and not find a buyer for 6 months. It has happened even to me. In that case, you need to go to plan B, which for me is to rent out the property section 8. That’s a good go-to, back up option for San Antonio distressed properties.
#4 Doing a Flip Deal with No Team
How many out of state investment property investors get into real estate investing on the side with no experienced team to rely on? What a disaster. You are almost certain to get hosed in San Antonio real estate investing.
To make a successful San Antonio flip, you need to have the following:
- An expert real estate agent/investor
- An experienced rehab crew
- Hard money lender (working with an experienced investor will be easier because he will have done a lot of deals with many HMLs in the area)
- Real estate attorney
- Title company
I have a San Antonio buy and hold and property flip team that I have worked with for 10 years.
#5 Flipping With Your Last $10,000 or $20,000
Sure you can risk it all and hit it big, but you also can get totally hosed. You should not do a San Antonio property flip with money that you absolutely have to have back in 90 days or the world will end.
For your first property flip in San Antonio, you can use a hard money lender to fund a good deal of the deal. You still will need maybe $10,000 or $20,000 of your own money. Make sure you can afford to have that money tied up for a few months! If you can’t, I’d wait to do a flip until you can.
#6 Doing the Rehab on Your Own
I usually maximize my profits on my buy and holds and flips because I know a lot about construction after 15 years. Many rookies lose their butts and get hosed on rehab. Do not do the rehab on your own unless you have YEARS of construction experience in similar projects, and you have the time to devote to the flip project.
#7 Never Doing a Deal
After all this gloom and doom about failing in flipping a house, the worst is really to never do a deal because you are afraid. You just need to do plenty of prep work and studying and networking to prepare to do your flip deal. Study the numbers, learn construction, assemble a good team, and when the time comes, do the deal!
If you are interested in doing a San Antonio property flip and are nervous, I’m happy to work with new investors with capital. I’ll show you exactly how I do it to make a $15,000 or $20,000 return in 60-80 days.
Should I Flip This Wholesale Property or Buy and Hold It?
I currently own in cash several dozen buy and hold San Antonio investment properties. While I do believe that long term buy and hold investing with owner financing or renting is the best way to build real estate cash flow, there also is a place for flipping properties.
When I first began in San Antonio wholesale property in 2001-2, I only had about $70,000 cash. That was enough to buy a couple of under market value San Antonio properties. After that I didn’t have any more capital.
So what I did next was place an ad in the local San Antonio newspaper and I found an under market value property investor who loaned me $2 million over the next two years. Our strategy was to fix and flip, and we split the profits on each deal 50/50.
But Should You Do a San Antonio Flip Property or Buy and Hold?
I believe there is room in San Antonio real estate investing to do both. Below is one of my wholesale properties that will work well as a flip or a buy and hold:
- Address: 1723 W Ashby Pl San Antonio, TX 78201,
- Year Built: 1925
- Description: Under market value property, investors dream north of downtown, 3 beds 1 bath, 1000 sqft, built: 1925, lot size: .19 acres, yearly taxes: $1,700.00, estimated yearly insurance: $800.00; estimated repairs: 35K, includes new HVAC, updated kitchen/bath, flooring, paint in/out, exterior skirt, appliances, plumbing/electric up to code, paint out door storage exterior, trash, lawn maintenance.
- Max After Repair Value: $129,000.00
- Cash Price: $69,900 firm.
- Exit Strategy: Owner Finance with 35K repairs: 5-10k down or more, $1,295.00 monthly P/I, 30 year amortization, 10% interest. Or 15K rehab, new HVAC, paint in/out, kitchen/bath repairs, plumbing/electric up to code, then FSBO at 109K, 10% interest, $1,100 monthly PI/TI, 30 year amortization.
- Alternate Exit Strategy: Flip with $35k in repairs for a ~$25,000 profit. Rehab completed in 45 days or less.
If you buy and hold this San Antonio turnkey property, you will make 13% ROI per year on a total cash outlay of $105,000. You also could buy this property with 20% conventional finance, and pay a mortgage of approximately $500-600 per month. Positive cash flow would be $950 to $1000 if you buy cash, and about $500 per month with the mortgage. Getting financing with a property such as this in San Antonio is pretty easy if you have decent credit and assets.
OR, you could flip this house for a $20-25k profit. Your profit margin will depend upon if you use hard money to do the project. I prefer doing my flips in all cash as you will save $3-4k in fees and interest payments.
It can take longer to resell the flip retail than it can take to owner finance it or rent it with a buy and hold investment. So that is something to remember.
Of course, some houses work better as buy and hold investments and some are better as flips. It depends on the size of the home, location, number of bedrooms and more when you buy as a San Antonio real estate investor.
Overall, the strategy I tell most investors with limited capital is to do 3-4 flips, and then take the capital and do a buy and hold investment with owner financing. That way you are combining the best of both worlds with your out of state investment property investing.